Market Strategies
Covering High Return Balanced Investing Success Strategies For
Stocks ■ Bonds ■ Interest Rates ■ Natural Resources ■ Currencies ■ Venture Capital ■ Gold
A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)
Contributing Staff: Michael King, Bill Chippas, Charles Moskowitz
April 23, 2012, Market Strategies
Where To Invest Now Newsletter
To subscribe to the Options Only Acct Trades simply TEXT the word UPDATES to 69302
and you will automatically be included.
To Read This Market Strategies Newsletter In Adobe PDF Version – CLICK HERE – http://www.princetonresearch.com/4-23-2012-Market-Strategies.pdf
$10,000 OPTIONS ONLY ACCOUNT
New Trades for this week
The $10,000 Options Only account had a Loss last week of $215 decreasing our gains for the year from $2,103 to $1,888.
Three positions remain:
The FAZ May 22 Calls,
CSCO May 20 Calls and
IBM May 205 Calls.
The Open positions are highlighted in the options table below.
Approximately $2210 funds are in use.
This was a week with many cross-currents. We had more EU news to depress the markets and terrific Q1 earnings for several of the markets leaders. MSFT was a standout for not only current earnings but also in the forward outlook arena. Moves in this stock haven’t been this good in decades. IBM was a mixed bag as were some of the numbers in the financial sector and AAPL comes in a few days. Many stocks have had “meaningful” corrections and may be approaching support.
The problem for me is that there may be more room to the downside (in a normal and expectable pullback) and we have a potentially troublesome “unresolved” technical formation called a Bear Flag. If resolved to its potential downside objective we could see the Dow and S & P 500 at the 12,300 and 1300 levels respectively. This makes taking on new trades very difficult. While keeping my eye on PPO, TLT, and KRO for upside action, and DXD, IPGP, FDX, and LULU for possible…repeat possible…downside action, we will maintain our long positions in IBM and CSCO as well as our balance using the RWM and FAZ (reverse financial group) for protection.
Look for updates via our free texting service as they may be important buy or sell signals….CAM
Remember, these trades are based on your participation in the
TEXT MESSAGE TRADE ALERTS SERVICE
TO RECEIVE ALL UPDATES.
TEXT the word UPDATES to 69302
To Get In Now
Previous closed out trades not listed here may be seen in the March, February and January weekly newsletters. See past issues at http://www.princetonresearch.com/market-strategies-newsletter/
DATE |
TRADE |
PRICE |
COST |
PROCEEDS |
RESULTS |
4/19 |
Bought 8 FAZ May 22 Calls |
1.50 |
1200 |
|
|
4/19 |
Bought 5 CSCO May 20 Calls |
.82 |
410 |
|
|
4/19 |
Bought 4 IBM May 205 Calls |
1.50 |
600 |
|
|
4/18 |
Sold 5 SBUX May 57.50 Puts |
1.28 |
|
640 |
110 Loss |
4/18 |
Sold 2 AMZN May 195 Calls |
7.65 |
|
1520 |
210 Gain |
4/18 |
Bought 5 SBUX May 57.50 Puts |
1.50 |
750 |
|
|
4/16 |
Sold 3 IBM May 200 Puts |
3.45 |
|
1035 |
15 Loss |
4/16 |
Sold 15 S April 2.5 Calls |
.19 |
|
285 |
300 Loss |
4/13 |
Bought 2 AMZN May 195 Calls |
6.60 |
1320 |
|
|
4/13 |
Bought 3 IBM May 200 Puts |
3.50 |
1050 |
|
|
3/16 |
Bought 15 S April 2.5 Calls |
.39 |
585 |
|
|
New trades $ 10,000 account…In Texting we have a limited amount of words. In the interest of brevity: OPTIONS ONLY: 5 May, 6 June . The Quantity and Strike Price for each trade is specific.
For any questions please call 702 650 3000
Market Laboratory –Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect
Dow 13029.26 +179.67 +1.40% |
Nasdaq 3000.45 -10.88 -0.36% |
S&P 500 1378.53 +8.27 +0.60% |
Transportation 5234.25 +37.21 +0.72% |
Russell 2000 804.05 +7.76 +0.97% |
Nasdaq 100 2676.04 -22.95 -0.85% |
Gold 1642.80 -17.40 -1.05% |
Silver 3165.1 +26.1 +0.83% |
Crude 103.88 +0.56 +0.54% |
Heating Oil 314.08 -3.81 -1.2% |
Unleaded Gas 3.1100 -.1567 -4.8% |
Natural Gas 1.927 |
VIX 17.44 -2.11 -10.79% |
Put/Call Ratios S&P 100 159/100’s +32/100’s |
Put/Call Ratios CBOE Equity
63/100’s -3/100’s
|
Bonds 141-31 +0-17 3.13% -0.02% |
10 Yr Note 131-214+0-44 1.97% -0.03% |
Copper 369.80 +7.10 +1.96% |
CRB Inflation Index 301.20 -1.65 -0.54% |
Barron’s Confidence 68.3.% -0.7% |
S&P100 626.10 +3.46 +0.56% |
5 Yr Note 123-167 +0-015 0.85% -0.01%
|
Dollar 79.31 -0.74 -0.92% |
DJ Utilities 460.75 +8.65 +1.91% |
AAII Confidence Index |
Bullish 31.21 +3.1% |
Bearish 33.8% -7.8% |
Neutral 35.0% +4.7 %
|
M1 Money Supply +18.9%April9th
|
M-2 Money Supply +10.1%April9th
|
M1…all money in hands of the public, Time Deposits Traveler’s Checks, Demand Deposits
M2 adds Savings and Money market Accounts both compared with the previous year.
New Stock Recommendations
Last week we Bought RWM and with Text Alerts we bought AAPL, FAZ and SIRI.
Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.
Stock |
Purchase Price |
Purchase Date |
Stop/Loss |
|
Price/Date Sold |
|
Profit/(Loss) |
AAPL 5 |
578 |
4/20/12 |
|
|
|
||
FAZ 250 |
22.07 |
4/19/12 |
|
|
|
||
SIRI 2000 |
2.265 |
4/18/12 |
|
|
|
||
RWM 200 |
26.95 |
4/16/12 |
|
|
|
||
AMZN 25 |
187.01 |
4/13/12 |
|
|
|
||
AAPL 10 |
612.01 |
4/13/12 |
|
|
|
||
TXGE*20830 |
.24 |
4/9/12 |
|
|
|
||
EXM 1200 |
1.90 |
4/3/12 |
1.60sco |
|
|
||
CWTR 2500 |
1.16 |
4/2/12 |
|
|
|
||
IYT 60 |
92.48 |
3/29/12 |
|
|
|
||
AIVN* 10000 * 5000 |
.25 |
3/12/12 |
.10 sco |
|
|
||
SNTS 1000 |
4.80 |
3/12/12 |
5.47 sco |
|
|
||
XBOR* 2000 |
2.25 |
2/24/12 |
|
|
|
||
CISG 600 |
8.50 |
2/10/12 |
|
|
|
||
XBOR*3570 |
1.40 |
8/12/11 |
0.70 sco |
|
|
||
LEI* 2425 |
2.06 |
8/10/11 |
1.03x |
|
|
||
LEOM*16650 |
0.30 |
12/17/10 |
0.03 sco |
|
|
Note: Previous closed out stock and option positions can be found in the April 16 and newsletters dating back to July 20, 2009. Stay alert on the free texting service for new trades and exits.
Model Portfolio Comments/Changes:
INDEX OPTION RECOMMENDATIONS
For those of you who do not buy puts to protect your portfolio, there are many ETF’s that are the inverse of the DOW. The symbols are DOG, SDS and RWM, whichgo up when the DOW, S&P 500 and Russell 2000 go down and down when they go up. The DZZ goes up double when gold goes down.
New Stock Option Recommendations
Option and Overall Comments
We had a Loss last week of $430 in an Up week.
Our gain for the year was $7,930 and with last week’s Loss has decreased to $7,500.
We have Three long options positions remaining, the CSCO Jan 20 Calls, CSCO May 20 Calls, IBM May 205 Calls. The Stock table includes Sixteen long stock positions: FAZ, RWM, SIRI, AMZN, AAPL, TXGE, EXM, CWTR, IYT, AIVN, SNTS, CISG, LEI, LEOM and XBOR (a double). FAZ and RWM are inverse ETF’s.
The options call for a $ 2,500 investment unless otherwise started, while each stock position requires $ 5,000 unless specifically stated.
We are basing money management on a hypothetical $ 100,000.00 and are using $2260 in the
options positions and $ 77,970 in the 16 long stock positions for a total of $ 80,230 with $ 19,770 in cash. These figures are approximate. We do not count commission costs and there may be errors.
Executions that have occurred at or near the open or close of trading sometimes vary from our actual numbers. For example, when something opens down and it is through our price, we take the next trade whether it is an uptick or continues lower. This sometimes results in a 50% trade that is slightly above or below the exact number…
Previous Week’s Recommendations and Rules for the $ 100,000 account
- Text UPDATES to 69302.
- All options count for about $ 2,500.00 for model portfolio calculations unless otherwise stated.
- When the option has doubled sell half the position.
- Stop Loss protection is either half or offered with each trade.
- The cost of the option is the asking price (or the price between the bid and ask, whichever is more realistic)
- The options will be followed until closed out.
- Option Symbols are stock symbol with expiration month and strike price
- Subscribers can follow us on Twitter or call 702 650 3000 for up to date information.
Option |
COST |
Date |
Sold |
|
Date |
Profit/(Loss) |
IBM May 205 8 Lots |
Calls 1.50 |
4/19/12 |
|
|
|
|
CSCO May 20 10 Lots |
Calls .82 |
4/19/12 |
|
|
|
|
SBUX May 57.5 10 Lots | Puts 1.50 |
4/18/12 |
1.28 |
4/18/12 |
(220) |
|
AMZN May 195 4 Lots | Calls 6.60 |
4/13/12 |
7.65 |
4/18/12 |
420 |
|
IBM May 200 6 Lots |
Puts 3.50 |
4/13/12 |
3.45 |
4/16/12 |
(30) |
|
S April 2.5 30 Lots |
Calls .39 |
3/16/12 |
.19 |
4/16/12 |
(600) |
|
CSCO Jan 20 3 lots | Calls .80 |
2/14/11 |
|
Note: Previous closed out stock and option positions can be found in the April 16 and newsletters dating back to July 20, 2009.
Previous closed out trades not listed here may be seen in the March, February and January weekly newsletters. See past issues at http://www.princetonresearch.com/market-strategies-newsletter/
Remember, these trades are based on your participation in the
TEXT MESSAGE TRADE ALERTS SERVICE TO RECEIVE ALL UPDATES.
TEXT the word UPDATES to 69302 To Get In Now
This Weeks’ Economic Numbers and Media Data
Monday | Investors will assess international political and economic events. |
Tuesday | 09:00 hrs Case-Shiller 20-city Index Feb ( -3.4% vs -3.8% )10:00 hrs Consumer Confidence Apr ( 69.5 vs 70.2 )
10:00 hrs New Home Sales Mar ( 320K vs 313K ) 10:00 hrs FHFA Housing Price Index Feb ( NA vs 0.0% ) |
Wednesday | 07:00 hrs MBA Mortgage Index 04/21 ( NA vs 6.9% ) 08:30 hrs Durable Orders Mar ( -1.9% vs 2.4% ) 08:30 hrs Durable Goods -ex Transportation Mar ( 0.5% vs 1.8% ) 10:30 hrs Crude Inventories 04/21 (NA vs 3.856M ) 12:30 hrs FOMC Rate Decision Apr ( 0.25% vs 0.25% ) |
Thursday | 08:30 hrs Initial Claims 04/21 ( 373K vs 386K ) 08:30 hrs Continuing Claims 04/14 ( 3300K vs 3297K ) 10:00 hrs Existing Home Sales Mar ( 4.62M vs 4.59M ) 10:00 hrs Pending Home Sales Mar ( 0.5% vs -0.5% ) |
Friday | 08:30 hrs GDP-Adv. Q1 ( 2.6% vs 3.0% ) 08:30 hrs Chain Deflator-Adv. Q1 ( 2.2% vs 0.9% ) 08:30 hrs Employment Cost Index Q1 ( 0.5% vs 0.4% ) 09:55 hrs Michigan Sentiment – Final Apr ( 75.7 vs 75.7 ) |
Economic Data
Commodities fell for the fifth consecutive week. The CRB index fell another 0.5% for a cumulative decline of 5%. Most economic reports were dismal last week: Industrial Production was flat, but 0.2% below the consensus; Housing Starts plummeted to 654K vs 700K expected and New Unemployment Claims were up again to 386K vs 375K consensus and 380K last week which was also revised higher to 388K. It all points to a sluggish economic recovery. Leading Economic Indicators bested the consensus by 0.1% at + 0.3%. Retail Sales were up 0.8%, the best positive economic report last week as credit card usage continues buoyant.
Fundamentals (previous letters may be seen at www.princetonresearch.com)
Strong earnings were an offset to weak economic numbers. Microsoft ( MSFT: $ 32.42 ) gained 5.2% on the week on good numbers, but with Apple having double the market cap, it was not enough to keep Nasdaq from a declining week, off 0.36%. The Dow was best up 1.40%, followed by the Russell, up 0.97%, Transportation gained a modest 0.72% and the S&P up 0.60%. Apple ( AAPL: $ 572.98 ) fell 5.3%.
The glamour stocks were raided and muted what might have been a bull week led by a sliding dollar which fell 0.92%. In addition to the Apple, smaller cap stocks like Panera Bread ( PNRA: $ 150.27 ) lost 7.4; Chipotle Mexican Grill ( CMG: $ 419.26 ) fell 4.8% and Priceline ( PCLN $ 710.17 ) -3.4%.
Nine of the ten Dow Industrial Groups were higher led by Health Care, up 2.15% and Utilities plus 2.04%. Telecommunications rose 1.32% and Basic Materials 1.26%. Industrials gained 1.21%. Technology, of course, led by Apple plummeted 1.75%.
Volatility continued to decline despite the rotten Apple, off 2.11 to 17.44 minus 10.79%. It is hard to get a bear market going with volatility declining.
Technical Information
Support Levels: S&P 500 1361; 1346 Resistance S&P 500 1383; 1399
DOW 12,890; 12,740 Resistance DOW 13,100; 13,340
QQQ 6509; 6430 Resistance QQQ 6659; 6755
Nasdaq 2972; 2937 Resistance Nasdaq 3045; 3092
CYCLES
Was April 2 the top for the first half of 2012? Maybe, maybe not. Unlike market bottoms that are more often than not events, market tops tend to be a process. At bottoms, consensus can be quickly reached about valuations and sentiment whereas at tops there is more mud in the water and debate. Having already issued our official Seasonal MACD Sell signal on April 3, and with markets lower today than they were on the day of our Sell Signal, our analysis remains the same and our posture remains defensive for the next several months.
This does not mean that we expect the markets to go in a straight line down. If fact, we would not be surprised to see the markets rally back near their recent highs, but seasonality, fundamentals, the technical picture, and economic data suggest that there is not that much additional upside opportunity in the short-term. The Fed and most other central banks are currently taking a “wait-and-see” approach. Additional central bank liquidity may come, but not anytime soon. Corporate earnings have been mostly mundane. There have been upside surprises, but estimates were quite low in the first place. Then there are the housing and labor markets. It is becoming increasingly clear that warm winter weather was responsible for their improvements as recent data has weakened. Slowing Chinese growth, Europe’s ongoing debt woes, and the nuclear ambitions of Iran and North Korea are certainly not going to send markets to new recovery highs anytime soon either.
Taking all of this into consideration, we are comfortable taking a defensive posture for the “Worst Six Months”, May through October. And although we are on defense, this does not mean we anticipate a significant bear market to develop. The robust start of election-year 2012, combined with bullish election year forces are likely to produce solid full-year gains, but the path to full-year gains is likely to be rough going for a while.
Rule 17B requires disclosure of payment for investor relations*
Princeton Research has received about $ 2,500 per month from Lucas ( LEI ) marked with an asterisk. Princeton has been paid for investor relations in the past and has negotiated a contract to be paid 100,000 restricted shares from Leo Motors. In addition Princeton has bought shares. Princeton is paid by Baron Energy ( BROE ) to do investor relations in the amount of 300,000 shares. Princeton has also bought separate shares about 327,600 and owns the shares for its own account. Cross Border paid us 25,000 restricted shares several months ago. We do not currently represent Cross Border. Princeton has 2,225,000 shares of AIVN.
Pursuant to the provisions of Rule 206 (4) of the Investment Advisers Act of 1940, readers should recognize that not all recommendations made in the future will be profitable or will equal the performance of any recommendations referred to in this Email issue. Princeton may buy or sell shares in companies it represents at any time.
CONTACT
Please Direct All Inquiries To:
Mike King
Princeton Research
3887 Pacific Street, Las Vegas, Nevada 89121
Phone: (702) 650-3000
Fax: (702) 697-8944
Visit: www.princetonresearch.com
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